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e-Tailing Update: Learn from Sears. Really!

Here is a sentence I never thought I would write: Sears may go out of business. Indeed, last April, The Wall Street Journal ranked the American retailing icon at the top of a list of the 10 retailers “most at risk to default within the next 12 months.”

By Dr. Larry Lapide ·
September 1, 2017

Here is a sentence I never thought I would write: Sears may go out of business. Indeed, last April, The Wall Street Journal ranked the American retailing icon at the top of a list of the 10 retailers “most at risk to default within the next 12 months.” Yet while brick-and-mortar retailers like Sears are teetering on the brink, the Journal later reported that pure e-tailers like Greats are opening brick-and-mortar stores. Another case in point is Amazon’s acquisition of Whole Foods, demonstrating that the e-tail leader is getting serious about invading the brick-and-mortar store chain markets, at least when it comes to groceries.

Clearly, we are at an e-tailing “inflection point.” The question for e-tailers jumping into the brick-and-mortar game, or for traditional retailers looking for the right supply chain formula to answer to the threat from e-tailers, is: What lessons can we learn from Sears to avoid the same fate?

A short history of mass-market retail*

Given all of the dire news, it’s easy to forget that Sears was the Wal-Mart of its day, the highest grossing merchandizer, with revenues equal to about 1% of the gross domestic product (GDP). When I look back over my life and career, it seems like I see the Sears name everywhere. Whenever I wanted to purchase something for the house, like an air conditioner, refrigerator, lawn mower, car battery or hand tools, I went to Sears, which was one of the most popular suppliers of hard goods, in contrast to soft goods such as apparel. When I started my career at a consulting firm back in 1976, Sears Catalog was one of my largest clients.

Here is a sentence I never thought I would write: Sears may go out of business. Indeed, last April, The Wall Street Journal ranked the American retailing icon at the top of a list of the 10 retailers “most at risk to default within the next 12 months.” Yet while brick-and-mortar retailers like Sears are teetering on the brink, the Journal later reported that pure e-tailers like Greats are opening brick-and-mortar stores. Another case in point is Amazon’s acquisition of Whole Foods, demonstrating that the e-tail leader is getting serious about invading the brick-and-mortar store chain markets, at least when it comes to groceries.

Clearly, we are at an e-tailing “inflection point.” The question for e-tailers jumping into the brick-and-mortar game, or for traditional retailers looking for the right supply chain formula to answer to the threat from e-tailers, is: What lessons can we learn from Sears to avoid the same fate?

A short history of mass-market retail*

Given all of the dire news, it’s easy to forget that Sears was the Wal-Mart of its day, the highest grossing merchandizer, with revenues equal to about 1% of the gross domestic product (GDP). When I look back over my life and career, it seems like I see the Sears name everywhere. Whenever I wanted to purchase something for the house, like an air conditioner, refrigerator, lawn mower, car battery or hand tools, I went to Sears, which was one of the most popular suppliers of hard goods, in contrast to soft goods such as apparel. When I started my career at a consulting firm back in 1976, Sears Catalog was one of my largest clients.